In New Term, Supreme Court To Tackle Divisive Issues

by: October 3, 2011

If the U.S. Supreme Court term opening Monday were a Broadway show, all eyes would be on the stars waiting in the wings.

The constitutional challenge to President Obama’s health care overhaul almost certainly will be decided this term, but at this point it has not formally made it onto the docket. Also making their way to the court are cases involving almost every hot-button issue in America: immigration; affirmative action; gay marriage; and the constitutionality of the Defense of Marriage Act, the federal law barring federal recognition of gay marriage even in states where it is legal.

A Challenge To State-Enacted Medicaid Cuts

Although these star cases are still backstage, as it were, there are plenty of important cases already center stage. In the spotlight Monday is a case testing when and whether doctors, hospitals and patients can challenge state-enacted reductions in Medicaid payments that violate federal law. It is a case with huge implications for cash-strapped states desperate to cut costs, and for patients desperate for care guaranteed by federal law — and paid for in large part by the federal government.

The federal Medicaid law establishes a cooperative federal-state program in which the federal government assists states to furnish medical help for the poor, elderly and the disabled. The federal government contribution varies from state to state, but is a majority of the total tab. The program is voluntary, but if a state participates, it has to comply with federal requirements, which include paying enough to health care providers that patients can get access to care. And the state, before cutting fees to health care providers, must get approval from the federal agency that runs the program.

In 2008 and 2009, the California Legislature cut fees for hospitals, doctors and other providers by as much as 10 percent. The changes went into effect without being submitted to the federal Medicaid agency as required by law, and when they were submitted, the cuts were not approved. When California went ahead with the cuts anyway, hospitals, doctors and patients sued to stop them.

Dr. Ruth Haskins, an obstetrician-gynecologist who practices in Southern California, has 4,500 patients, about 15 percent of them Medicaid, or Medi-Cal, as the program is known in California. She and other doctors worry that they will simply have to stop taking Medicaid patients.

“I have a quota already … because the reimbursement is just too low to meet my overhead,” Haskins says.

She notes that 56 percent of Medicaid patients in California at this point cannot find a primary care doctor, and hospital administrators tell horror stories about unmet medical needs.

After a federal appeals court ruled the cuts were illegal and halted them, California appealed to the U.S. Supreme Court. The state, backed by the Obama administration, contends that health care providers and their patients have no right to sue to enforce the Medicaid law.

California Solicitor General Manuel Medeiros says these cuts amount to a contract dispute between the United States and the state, and the health care providers don’t get to horn in on that dispute by taking the state to court.

“There was no expectation that we were going to have to be administering this multibillion-dollar program by ad hoc litigation, where courts can substitute their individual judgment for the views of an expert administrative agency that has worked out the problems with the state administrative agency, balancing the competing state and federal interests and policy objectives,” says Medeiros.

Countering that argument, lawyer Carter Phillips, representing the health care providers, contends that if California had in fact been able to show how it was balancing competing interests, there would have been no case. But, he maintains, it didn’t do that.

“California has a budget problem, and that is all that animated California’s actions in this case,” he says. “There was no effort made to determine whether or not these cuts would have any impact on services.” The state just said, “We want to save money, we’re doing it this way, we’re done.”

The lower court said that was illegal and ordered the state to stop the cuts, citing a long line of cases that bar state officials from defying federal law. But the state contends that Congress did not specifically authorize this kind of lawsuit, and that even if the state did act illegally, the only remedy would be for the federal government to cut off all federal Medicaid funds — a process that would take years and has never been done because the consequences are so dire.

Interestingly, this dispute pits Democrats against Democrats. Though the case started during the tenure of Republican Gov. Arnold Schwarzenegger, it is being carried on by Democratic Gov. Jerry Brown.

And while the Obama administration is supporting Brown and the state, the Democratic leadership in Congress, including key California Democrats, has filed a brief on the other side, supporting the rights of the providers to sue to enforce the Medicaid law. The Democratic congressional leadership says the Obama administration has, in essence, formed an unholy alliance with the states to undermine the minimums set out as conditions for the federal government giving billions of dollars to the states.

The state’s Medeiros responds ruefully. “These are peculiar times,” he says. The states and the federal government are operating under a very severe fiscal crisis, and everybody’s trying to manage their financials the best they can.”

Other Cases On The Docket

Later this week, the court will hear another thorny constitutional question testing whether the federal Americans with Disabilities Act applies to parochial schoolteachers whose primary job is teaching non-religious courses like math and history.

Like all civil rights laws, the ADA bars not just discrimination, but also retaliating against an employee who threatens to sue to enforce his or her rights under the law. In the case before the court, a Lutheran church school contends that the law violates its religious mandate to resolve disputes internally.

Also on the docket next week is a case testing whether the Constitution allows local jailers to automatically strip-search even those arrested for minor offenses, including traffic violations. And later in the term, the justices will examine a case testing whether government investigators have to get a warrant before putting a GPS tracking device on a car.

The term also features a variety of cases pushing conservative causes, a property rights challenge to EPA enforcement of the Clean Water Act, and a free-speech challenge to union dues collected from all state employees. And there are a wide variety of criminal law cases that could have significant repercussions.

On the more entertaining side of the docket is a case brought by Fox TV and backed by other broadcasters testing the constitutionality of a Federal Communications Commission ban on expletives, nudity and other “indecent content” on TV and radio.

At issue in the case are fines imposed on Fox for excretory and sexual expletives uttered by celebrities at the Billboard Awards ceremonies broadcast live by the network. A lower court ruled that the ban on indecency is so vague as to be unconstitutional, meaning nobody would know what is and isn’t legal. Now the case is at the Supreme Court, along with a lot of other cases with sex appeal, both real and figurative.

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